Six years after going public, software and services group Admiral Plc, is still prospering despite the recession, while continuing to move into new markets. As a reflection of this growth, the company has consistently taken on new staff headcount has risen from an average 484 in 1991, 551 in 1992 to 620 now. For the year to December 31, pre-tax profits rose 14.8% to UKP4m, while turnover increased 18.3% to UKP30.9m. The board has recommended a dividend of 3.7 pence, bringing the total for the year up to 5.4 pence, a rise of 13% on 1991. The Camberley, Surrey-based group attributes its success to several factors. Firstly, to grow a business, it is necessary to go out there and find work, especially because the number of large contracts around is falling. According to executive chairman Clay Brendish, the firm has invested heavily in sales and marketing to attract new business, although on average between 70% and 80% of revenues come from the previous years’ customers. The company still has 80% of the clients it had in 1987, he added, comprising more than 430 sites, which range from government departments to blue-chip companies. Second, he said, it is important to offer clients the right rates and finish projects both on time and within budget. Third, it is necessary to keep internal costs down.
Various advantages
Brendish said that Admiral keeps a tight rein on costs, and evidence of its success was this year’s 16% rise in operating profits to UKP3.5m. Many contracts, he said, are currently won on the basis of price, especially in government and defence. Still, although the company now faces competition from ‘almost everyone’, ranging from Logica Plc and Anderson Consulting to big vendors such as IBM Corp, it reckons it has various advantages over its competitors. The group is quite small and so, Brendish believes, more flexible. It is organised on a skills basis rather than in relation to the markets it addresses, meaning that it is not dependant on the fortunes of an individual sector. And finally, it has an established customer base and people know that, unlike some smaller firms, it will be around in a few years’ time. Its two fastest growing markets are industry, which generates 12% of turnover, and commerce, which generates 9%. In 1991, both these came under the category of ‘other’ and jointly made up 11% of revenues. The traditional business of defence has dropped to 27% this from 37% of the total last year, not because Admiral is running it down, but because other revenue streams have grown proportionately. Government has also fallen to 18% from 21% of income, while finance has risen to 34% from 31% – Blendish said that Admiral now works for all the major banks, some of the smaller ones and an assortment of building societies and insurance companies. He also stated that all operating divisions made a profit. The largest company in the group, software developer Admiral Computing Ltd, broadened its markets, achieving ‘notable success’ in the commercial sector. Last May, it acquired the assets of CBC Ltd for UKP450,000, and as a result, is now able to offer its own software product, Transdrive, for the first time. Transdrive is performance testing tool, which runs on Tandem Computers Inc boxes, but it does require some customisation to meet the needs of individual customers. The consultancy subsidiary, Admiral Management Services Ltd, also increased its penetration of new and existing markets despite business confidence being low and customers taking a long time to make decisions. Work in the government sector is starting to pick up, Blendish said, and he reckons the company will benefit from the government market testing initiative in such areas as application development and training. Admiral Training Ltd won contracts in government, finance and industry on the back of existing accounts from other members of the group, while software distributor, Admiral Software Ltd, started selling ‘off-the-shelf’ kit. Powerbuilder from Powersoft Corp and Database Gateway from Micro Decisionware Inc sold particularly well. Adm
iral Australia continued to suffer from a depressed economy and didn’t perform as well as anticipated, but according to Blendish, ‘A faint glimmer of an upturn appeared in the last months of the year’. ITEC, the 51%-owned joint venture with the Singapore government won some significant contracts in its specialist areas of quality management and com.lh 6puter-based training, and is moving into Malaysia.
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